Eytan Uliel of Challenger Energy explains the plans for their Uruguay Licence

Eytan Uliel, CEO of Challenger Energy #CEG explains the plans for their Uruguay Licence after final approvals by decree of the President, progress at other parts of the business and recent significant shareholders announcements.

Challenger Energy (AIM: CEG), the Caribbean and Atlantic-margin focused oil and gas company, with oil production, appraisal, development and exploration assets across the region, provides the following update in relation to the AREA OFF-1 petroleum licence offshore Uruguay.

·   The AREA OFF-1 licence was awarded to the Company in May of 2020. Since that time there has been an extended period on non-activity, largely as a result of the Covid-19 pandemic, during which formal signature of the licence was pending.

·   Following final approvals being granted by decree of the President of Uruguay, the AREA OFF-1 licence was formally signed on 25 May 2022. Consequently, the first 4-year exploration period under the licence has commenced.

·   The Company's minimum work obligation during this initial period is to undertake relatively modest, low-cost reprocessing and reinterpretation of selected historical 2D seismic data. There is no drilling obligation in the initial phase. The Company's work program and budget for the balance of 2022 and into 2023 includes sufficient allocation of funds to progress the agree minimum work obligation on AREA OFF-1.

·   AREA OFF-1 contains a management estimated resource potential exceeding 1 billion barrels of oil equivalent recoverable (BBOE), based on current mapping from multiple exploration plays and leads in relatively shallow waters, and with significant upside running room. This estimate is corroborated by formal resource estimates provided by ANCAP (the Uruguayan national oil company) of 1.36 BBOE as a P50 expected ultimate recoverable resource.

·   The AREA OFF-1 play system is directly analogous to the recent prolific, conjugate margin discoveries made offshore Namibia by Total (the Venus well) and Shell (the Graff well), where reported multi-billion-barrel Cretaceous turbidite reservoirs have been encountered. The AREA OFF-1 licence exhibits the same Aptian play source rock and petroleum systems being present.

·   The Company has received multiple indications of interest in relation to potential partnerships for the AREA OFF-1 licence. The Company intends to explore such possibilities, with a view to potentially expediting a 3D seismic acquisition into the first licence exploration period. Further updates will be provided as and when appropriate.